Updated: EDF customers to face energy price hike

The financial pressure on firms to curb their energy use looks set to intensify after EDF announced it was rising prices for domestic and small business customers and Scottish and Southern Energy (SEE) warned it to may be forced to increase bills as a result of soaring wholesale energy prices.

EDF said that from today gas prices for domestic customers and small- and medium-sized enterprises (SMEs) will be 22 per cent higher, while electricity prices will rise 17 per cent.

The company said that its hand had been forced by record wholesale energy prices, adding that since it last raised prices earlier this year, the cost of coal had increased by 70 per cent, gas had seen price rises of 63 per cent and wholesale electricity prices had risen by 47 per cent.

Meanwhile, SSE chief executive Ian Marchant told shareholders at the company's annual meeting yesterday that it may be forced to follow suit. He said that the firm had managed to hold off price increases so far, but warned it was "becoming more difficult by the day".

"The extent of the energy shock with which the entire global economy is having to contend has been well documented and its full impact on prices for electricity in the UK has still to be felt," he said.

The comments come just a week after energy giant Centrica issued a report warning household energy prices could rise by up to 60 per cent over the next three to four years.

The developments will feed concerns that rising wholesale prices will also impact business energy bills. Business tariffs tend to be negotiated on a case-by-case basis, however industry observers have warned that firms can expect to see price rises on a similar scale to those being experienced by domestic customers.

A spokesman for EDF said that its large business customers were locked into longer-term contracts and would not be directly affected by the changes. But he added that rising wholesale prices were creating upward pressure on bills right across the market.